The decision comes after Imagination received interest from a number of parties, Imagination said in a statement on its website, adding that preliminary discussions with potential bidders are already underway.

Apple's decision to ditch Imagination was a huge blow for the UK tech firm, which recorded a revenue of more than £120 million ($149.4 million) in the year leading up to April 2016.

Apple
Imagination's partnership with Apple goes back nearly 10 years. Imagination products have been part of all of Apple's mobile devices — iPhones, iPads, and iPods — since 2008. It was one of Apple's most-valued suppliers.

Apple, which owns a 9.5% stake in Imagination, has been using Imagination's graphics processing unit chip designs under a licensing agreement worth millions of pounds to Imagination every year.

But in April, Imagination said in a statement: "Apple is of a view that it will no longer use the Group's intellectual property in its new products in 15 months to two years time, and as such will not be eligible for royalty payments under the current license and royalty agreement."

Imagination, which employs roughly 1,700 people, saw its market value drop by more than 75% on the day the breakup was announced. The share price drop was one of the biggest on record for a company of Imagination's size. Imagination's market capitalization is now around £350 million ($450 million).

Analysts questioned whether Imagination would be able to survive without Apple immediately after the breakup was announced. "In the worst case, survival, let alone value, is in question," Jefferies equity analyst Ken Rumph said in a note to investors. Rumph added that the breakup was likely to dent Imagination's profits by £65 million a year.

Shares in Imagination recovered slightly after the initial crash but they were still down around 60% on Wednesday, meaning someone could snap up Imagination for half of what it was worth a few months ago.

However, the company's shares jumped 20% on Thursday on the news that the company was up for sale.

Google Finance

"Shares in Imagination Technologies look set to rally on the open after the company said it is beginning a formal sales process after receiving interest from a number of potential buyers," said Neil Wilson, a senior market analyst at ETX Capital, on Thursday.

Apple CEO Tim Cook.
REUTERS/Beck Diefenbach
"It was never going to be easy for Imagination Technologies when it lost its biggest customer and efforts to offload two of its three main businesses - MIPS and Ensigma - in a bid to strengthen the balance sheet clearly weren't enough," said Wilson. "These were both strong potential growth areas that could have delivered lasting revenue accretion to offset the loss of Apple.

"That was a pretty dire scenario, akin to selling off the family silver to keep the estate going a little longer. Now the shutters are up and a buyer sought. A pretty ignominious end to what was a great British tech success story."

Imagination said it remains in a dispute with Apple.

Imagination added: "There can be no certainty that any offer will be made for Imagination, nor that any transaction will be executed."